regulatory environment

Regulatory environment

Due to its characteristics, technological innovativeness and great importance to the national economy, the telecom market is subject to regulation. The underlying piece of legislation which regulates this market is the Telecommunication Law of 16 July 2004.

The Office of Electronic Communications (“UKE”) is Poland’s national regulatory authority (www.uke.gov.pl).

The regulatory environment is determined by the division of the sector into relevant markets.

The Office of Electronic Communications is tasked to define relevant markets in line with EU guidelines and determine if they are effectively competitive. If there is lack of evidence that effective competition is present on a relevant market, President of UKE designates a telecom operator or operators as having significant market power (“SMP”) on that market and imposes regulatory obligations thereon.

Orange Polska has been designated by the Office of Electronic Communications as an SMP operator on a number of fixed line and mobile relevant markets. Consequently, the President of UKE has imposed a range of regulatory obligations on Orange Polska.

Pursuant to President of UKE’s decisions issued in 2012, Orange Polska has a significant market power in the following relevant retail markets:

Market for provision of access services to a fixed public telephone network and maintaining readiness to provide telecommunication services to consumers (market 1/2003);

Market for provision of access services to a fixed public telephone network and maintaining readiness to provide telecommunication services to business customers (market 2/2003).

In particular, Orange Polska is subject to an obligation to obtain UKE’s approval for its price lists and terms of service provision as well as prohibition of predatory pricing, pure bundling and provision of unjustified preferences for groups of users. The Company is also obliged to not hinder the market entry of other operators.

Pursuant to President of UKE’s decisions designating Orange Polska as an SMP operator in the relevant wholesale markets according to the European Commission’s recommendation of 2007, the Company has the following regulatory obligations:

In the domestic market for call origination on a fixed public telephone network (market 2/2007): obligation to enable end-user service management, offer wholesale services for the purposes of resale (WLR), provide telecommunications infrastructure and enable colocation and other forms of facility sharing;

In the domestic market for call termination on Orange Polska’s fixed line network (market 3/2007): obligation to provide access to the network on non-discriminatory terms specified in the reference offer, including obligation to charge flat interconnect rates for the service;

In the domestic market for provision of wholesale (physical) access to network infrastructure, including shared or fully unbundled access, in a fixed location (market 4/2007): obligation to provide access on non-discriminatory terms and apply cost-oriented charges; the scope of the market includes not only copper but also fibre optic loops;

In the domestic market for wholesale broadband access services, excluding 76 local administrative units (market 5/2007), where the market was recognised as competitive: in the deregulated areas, Orange Polska has no regulatory obligations, excluding an interim obligation (to October 2016) to maintain the BSA access provided before, whereas in the regulated area, it has an obligation to provide access to its copper and fibre optic infrastructure on the terms specified in the reference offer approved by the President of UKE;

In the national wholesale market for high quality access services at a fixed location, up to 2 Mbps (market 4/2014 up to 2 Mbps): regulatory obligations related to access, non-discrimination and transparency, including obligations to submit a reference offer and carry out regulatory accounting, have been imposed on Orange Polska; in addition, the Company has an obligation to charge cost-oriented wholesale rates.

The President of UKE has designated Orange Polska as an operator having significant market power in the market for call termination on Orange Polska’s mobile network. The most important obligation imposed by UKE is to provide call termination services based on costs; hence, MTR regulation by the President of UKE. The other key regulatory obligations are the non-discrimination obligation, the transparency obligation (to disclose and publish information on matters related to providing access) and the obligation to provide telecommunication access.

Furthermore, the President of UKE has designated Orange Polska as an SMP operator in the market for SMS termination on Orange Polska’s mobile network. The most important regulatory obligation in this market is to provide SMS termination services based on costs.

For more information about the regulatory obligations of Orange Polska please see the Management Board's Report.

Further information on the regulation of Poland’s telecom sector is available on the Office of Electronic Communications’ website at www.uke.gov.pl.